Building a sales budget is one of the most powerful ways to steer your business toward growth. Without one, companies risk misallocating resources, missing targets, or reacting too late to market changes. A well-structured sales budget not only sets revenue expectations but also helps align teams, anticipate costs, and create accountability across the organization.

In this blog post, we’ll cover what a sales budget is, why it matters, and how Salesforce – combined with our Sales Budget Builder – can help you set up and track sales performance with confidence. We’ll also walk through the top-down and bottom-up budgeting approaches, and show how to prepare your data foundations to kick-start the process.

What is a sales budget?

A sales budget is a detailed projection of a company's anticipated sales volume and the corresponding revenue within a defined sales cycle – typically annual, though it can also be monthly or quarterly. It combines expected unit sales and unit pricing and incorporates input from various departments, including marketing, sales, accounting and management.

Why do you need a sales budget?

A sales budget provides a clear roadmap for your business, enabling confident navigation of the market. It serves as a vital tool for:

  • Performance Measurement: Compare actual progress against your budget to identify areas for strategic adjustment and resource reallocation.
  • Cost Planning: Anticipate expenses associated with each sale, facilitating proactive financial planning. For instance, projected unit sales can directly inform your marketing and production budgets, guiding allocation to achieve targets.
  • Comprehensive Oversight: Monitor financial performance, track team progress, make informed decisions, and identify both strengths and areas for improvement.

Building your sales budget with Salesforce

Salesforce is a powerful customer relationship management (CRM) tool that can serve as a backbone of your budgeting process. Use our Sales Budget Builder on Salesforce (minimum required: Enterprise Edition) to create and manage your sales budget – it helps you better understand your sales performance and make more informed decisions. By using data in Salesforce and other systems, you can improve your sales forecasting, track your sales team’s performance, and adjust your budget.

In addition to our Sales Budget Builder, Salesforce offers robust auxiliary tools for sales budget management, enabling you to create custom reports and dashboards. These features provide a clear visual overview of your sales performance, including total revenue, expenses, and gross profits.

By leveraging Salesforce, you gain a deeper understanding of your sales data, which facilitates more informed budgetary decisions. The platform supports in refining sales forecasting, monitoring team performance, and making necessary budget adjustments.

How it works: Simultaneous Top-Down & Bottom-Up

When establishing a sales budget, two primary approaches are commonly employed: top-down and bottom-up.

A top-down budget is initiated by senior leadership and then cascaded through the organization. This method ensures the sales budget aligns with the overarching company strategy. However, it may overlook crucial insights held by frontline staff and teams, potentially leading to an incomplete picture. The granularity of a top-down budget is usually set at the Product Class or Product Family level.

A bottom-up budget originates with the insights of frontline personnel. This approach treats all teams as stakeholders, encouraging their participation and contribution of data and knowledge. While this process demands more extensive planning and communication, it generally yields a more accurate sales budget than a purely top-down method. The bottom-up budget is typically prepared at the account level per Product Hierarchy Cluster – the required level is usually provided by Planning (e.g., site managers and procurement) in order to process the sales budget into capacity and raw material needs.

The most effective approach is to combine top-down and bottom-up methods, aligning strategic goals with operational accuracy.

How to start

To kick-start the budgeting process, the three pillars of Data Management need to be covered:

  1. Master Data
    • For the geographical view (also known as Sales Territories), accounts need to be mapped to the territory hierarchy – for example, Germany could be mapped to Europe – DACH, Italy to Europe – South.
    • Products need to be mapped to the product hierarchy, e.g. SKU ABC123 belongs into Hierarchy “Composites – Glass Fiber – GMT”.
  1. Transactional Data
    • Actuals for the previous year or the last 12 months (LTM)  are based on transactional orders and invoices.
    • Pipeline performance, including KPIs like average win/loss rates, is based on CRM opportunity data.
  2. Reference Data
    • Attribute accounts and products to reporting reference data.
    • Consolidate master and transactional data into a data cube – your single source of truth for building and tracking the sales budget.

Additional material: https://www.salesforce.com/au/blog/what-is-a-sales-budget/